David Cameron needs to be both angry and compassionate

The Conservative Party should study the lessons of the Thatcher years if they
are to win convincingly at the next General Election, says Charles Moore.

Until last year, David Cameron hoped that he would become prime minister with a booming economy. His team really did think that Britain had "solved" its economic problems, and could move from worrying about the standard of living to the higher concept of "general wellbeing". What Margaret Thatcher had done for the economy, they wanted to do for "the broken society".

They were right about the broken society, but wrong about the economy. They made the mistake of believing Gordon Brown. They said that tax cuts could be "paid for out of the proceeds of growth". But if they win the next election, they will be dealing with the biggest public debt in our history and the pains of almost two years of contraction.

On Thursday, Mr Cameron made a major economic speech, trying to wrestle with this problem. His difficulty is partly one of timing, as he admitted. He still wants to mend the broken society and reduce "the bills of social failure" (a Tony Blair phrase which he has adopted), but he recognises that this will take a long time, and will not produce immediate economic benefits. In the short term, he will have to rein in public spending fiercely.

Inevitably, he was less frank about his other difficulty, which is that hard times threaten his carefully constructed image of niceness. He thought he could bicycle – green, smiling, tieless – into Number 10. Now the coloration is very different. The country is in the red, and the issues seem black and white.

So, contrary to their expectations, the Conservatives find themselves where they were when they last gained power from opposition 30 years ago. The country is in the most terrible economic mess. Does this mean that Mr Cameron has to become like Mrs Thatcher?

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I would say, yes. But before Tory modernisers throw up their hands in horror, I should make it clear that I am talking about Mrs Thatcher as she appeared to the general public in 1978-79, not the Mrs Thatcher of subsequent legend.

The Iron Lady who became famous for her boldness and fierceness was also capable of caution. As she geared up to fight her first election as party leader, she knew, just as Mr Cameron knows today, that her party would lose if people thought that it was divisive and selfish. Indeed, it was against selfishness – the wealth-destroying, job-destroying greed of organised labour – that she campaigned.

The reason the Tories launched their famous poster "Labour isn't working" was not only to put the blame on the government (of course), but to display their own compassion for the unemployed. Popular memory places this poster in the election campaign of May 1979. Not so. It appeared in the summer of 1978. It helped set the Tory tone of social concern.

And when, in 1979, the trade unions plunged the country into the Winter of Discontent, Mrs Thatcher gave a party political broadcast offering to co-operate with Labour to rush through the necessary reforms of trade union law. "We have to learn to be one nation," she said sweetly, "or we shall be no nation." Her theme was the same as Mr Cameron's. As he repeated on Thursday: "We're all in this together."

Nor, contrary to what most people think, did the Conservatives specify tax cuts (or privatisation or monetarism) in their 1979 manifesto – they promised generalised income tax cuts, but also VAT rises. As for spending cuts, there was much talk about eliminating "waste", but careful avoidance of detail.

In this newspaper, the Thatcherite candidate Jock Bruce-Gardyne wrote an article during the campaign entitled "Where the axe will have to fall". A furious Mrs Thatcher kept him out of office for the next two years.

As a result of this caution, economic experts were far from persuaded. I must disagree with my esteemed colleague Edmund Conway, who wrote recently that the then shadow chancellor, Sir Geoffrey Howe, convinced opinion-formers of his party's economic credentials in a way that modern Tories have failed to do.

In fact, many in 1978-79 doubted that the Tories knew what to do about inflation, incomes policies, public spending or unions. They faced credibility problems as acute as George Osborne and his team face today. But, like Mr Osborne, they resisted trying to calm these critics by setting everything out. The political strategy trumped economic exactitude, quite rightly. And that strategy, like that of David Cameron, appealed to decency, fairness and opportunity.

So far, then, Mr Cameron is putting himself in the right place. But now we come to two things that Mrs Thatcher had which his party seems to lack. The first is anger. Nowadays our cross-party political class, with its huge pensions and perks, is coddled. No party leadership seems to have much idea of just how unpleasant things are for people who try to make their own way in the world.

Such people are getting poorer. They see that two other classes of people are not – the undeserving rich, led by Sir Fred Goodwin, and the bureaucrats, who are unsackable and driven by "targets".

Without being rabid, political leaders need to share this anger – the rage, for example, of people who have saved for their retirement, and find their efforts nullified by Gordon Brown's taxes and Fred-Goodwin-style management of their investments. Mr Cameron is aware of these feelings, and mentioned them on Thursday, but he does not seem personally angry.

At an emotional level, Mrs Thatcher instinctively identified with certain groups – housewives, soldiers, grammar-school parents and teachers, small businessmen, "the butcher, the baker, the candlestick-maker". She spoke about "our people", and everyone knew what she meant.

Mr Cameron fears that talk of "our people" alienates everyone who does not come into that category. He wants his appeal to be wider. The danger is that if it gets too wide, it grows shallow. If voters detect that the Tories don't really feel what they are saying, they will conclude, as polls show many doing: "They're all the same."

There is a real fragility in our faith in the country's political arrangements which was not there 30 years ago. The parties barely seem to notice.

Behind this need for anger is something more important still. In 1978, Mrs Thatcher was asked what were the sources of her political strategy. She replied: "My beliefs."

This answer had the merit of being true. It had the additional merit that, in a crisis, voters seek out leaders with beliefs. When Labour and Tory alike thought that "Things can only get better", there was little competition between beliefs. Elections were a marginal comparison of competence, freshness and price, like whether you shop at Tesco or Sainsbury's.

No longer. In politics, as in commerce, a crash makes people test value. Value rests on belief. In this contest of value, the Conservatives are now ahead of Labour, but not by nearly enough.